Blockchain is a kind of distributed ledger which records the transactions in an ever-growing list of blocks. Its nature of trust comes from the fact that the execution of every transaction can be verified by any user of the blockchain. Existing blockchains, such as BTC and ETH, live up to this promise in an intuitive way: they make everything public, including the transactions and the internal states of smart contracts. This brings the problem: confidential data cannot be processed by these blockchains.
Phala Network tries to tackle this challenging problem. It seeks to provide a strong guarantee of confidentiality without sacrificing cross-contract interoperability, which means the confidential contracts in Phala Network can interact with other confidential contracts freely. Further, as a Polkadot parachain, Phala Network enables cross-chain interoperability of smart contracts to confidentially operate assets on another blockchain.